ATI (ATI) Q4 2023 earnings summary

Executive summary

• FY2023 revenue rose 9% to $4.174B; adjusted EBITDA excluding special items was $634.6M, and adjusted EPS was $2.56.

• A&D reached 63% of Q4 sales, up from 61% in Q3'23 and 53% in Q4'22; titanium shipments increased 58% YoY.

Financial highlights

• Q4 revenue was $1.064B, up 5% YoY; adjusted EBITDA was $160.7M, up 3%, with a 15.1% margin.

• Q4 reported net income was $145.7M, or $0.99/share, including a $137.4M discrete tax benefit; adjusted net income was $93.0M, or $0.64/share.

• FY2023 reported net income was $410.8M, or $2.81/share; adjusted net income was $373.4M, or $2.56/share, and adjusted EBITDA was $634.6M, up 4%.

Outlook and guidance

• Q1'24 adjusted EPS guidance: $0.36–$0.44; FY2024 adjusted EPS: $2.12–$2.52 and free cash flow: $245M–$325M.

• FY2024 assumptions include capital expenditures of $190M–$230M, managed working capital cash use of $50M–$100M, and cash taxes of ~$19M; effective tax rate guidance is 22.5%–23.5%.

• Long-term targets remain revenue above $5B and adjusted EBITDA of $1B by 2027.

• Continued A&D growth and a 45% titanium production-capacity increase from existing assets are expected; industrial headwinds are expected to persist in 1H'24.